Turkey: What If It Leaks?

The Turkish Law Perspective On Third Party Civil Liability In
Nuclear Accidents

As Turkey embarks on the path to becoming a nuclear energy
nation with the start of the pre-construction preparations of the
nuclear power plant in Akkuyu, Mersin by the Russian
Rosatom1, the discussions on safety related issues are
far from settled. The debate once again flared up in the wake of
the unfortunate radiation leak on the Fukushima nuclear power plant
following the devastating earthquake and the tsunami in Japan on
March 11, 2011. As the world revisits the significance of safety
measures in nuclear power plants and the adequacy of third party
civil liability regulations in nuclear accidents, Turkey, too opens
the gateway for national legislation further to the existing rules
of international treaties. From that perspective, this article
looks into the application of the Paris Convention on Third Party
Liability in the Field of Nuclear Energy2 (the
"Paris Convention") in Turkey and the recent changes in
Turkish law relating to peril liability which will be effective
from July 1, 2012.

The Relevant Legislation

Turkey passed a nuclear energy law4 in 2007 to
regulate the establishment and operation of nuclear power plants
within its borders. That being said, this legislation does not
provide for any rules regarding third party civil liability in
nuclear accidents.4 Therefore, the matter falls under
the realm of the Paris Convention which now lies at the top of the
legislative hierarchy (after the constitution) following its
ratification in 1961. Although the Paris Convention lays out the
basics of legal liability arising from nuclear damages, it leaves
room for the contracting states to make detailed domestic
legislation in compliance with the Paris Convention. Unlike
countries such as Germany, France or Switzerland, Turkey is yet to
take legal measures specific to third party civil liability arising
from nuclear accidents.

Though very general in scope and nature, the introduction of
"peril liability" by the new Turkish Code of Obligations
(the "New Obligations Code")5 may be deemed to
herald further legislative action. The peril liability in the New
Obligations Code is related to a facility, which, due to the nature
of its activity or the materials, tools or powers used for this
activity, is prone to causing frequent or dire damages regardless
of any precautionary measures which may be expected to be enforced
by an expert in the related field of activity.6 No
doubt, nuclear installations would fall under this category.
However, because the New Obligations Code's peril liability
provisions fail to make specific reference to nuclear
installations, the Paris Convention remains the first and foremost
applicable law in Turkey in nuclear incidents. Therefore, the
persons who will be liable for nuclear damages, amount and
conditions of liability and compensation claims need to be analyzed
in light of the provisions of the Paris Convention, with reference
to the regulations of the New Obligations Code, to the extent they
are complementary.

What is a Nuclear Accident?

Any occurrence or succession of occurrences having the same
origin which causes damage, provided that such occurrence or
succession of occurrences, or any of the damage caused, arises out
of, or results either from the radioactive properties, or a
combination of radioactive properties with toxic, explosive, or
other hazardous properties of nuclear fuel or radioactive products
or waste or with any of them, is a nuclear accident.7
The Paris Convention deals only with damages arising from this
scope and regular accidents in nuclear installations which do not
arise from radioactive properties will be out of its realm, thus
out of the scope of this article.

In that respect, nuclear installations comprise not only
reactors and factories for processing of nuclear substances
(including nuclear fuel, radioactive products and waste), but also
the facilities for the storage of these substances.
8

Who is Responsible?

The New Obligations Code holds the owner and the operator of a
high-risk facility jointly liable for damages arising from the
activities of this facility.9 The Paris Convention, on
the other hand, does not set forth a joint liability and holds the
operator accountable in most cases. Since the nuclear incident
specific regulations of the Paris Convention stand above the
general peril liability provisions of the New Obligations Code, the
persons below will be the responsible parties.

1.Operator:

Save for some exceptional circumstances described below in this
section, the liability for damages to a person or property caused
by a nuclear accident will be borne by the operator of the nuclear
energy installation10. The Paris Convention defines the operator as
the person designated or recognized by the competent public
authority as the operator of that installation. In the case of
Turkey11, TETAŞ (the state owned Turkish
Electricity Trade Company) will initiate a tender to determine the
grant of the license to establish and operate a nuclear power
plant. The requirements for the applicants will be determined and
reviewed by the Turkish Atomic Energy Institution, TETAŞ
will then present to the Chamber of Ministers its proposal as to
the designated licensee. Only upon the approval of the Chamber of
Ministers, the Energy Market Regulatory Authority will issue the
production license for the relevant company, which becomes the
"operator of a nuclear installation" within the meaning
of the Paris Convention. In the case of the Akkuyu Plant, though,
the Turkish subsidiary of Rosatom12 was designated as
the operator by a treaty13 between Turkey and Russia and
this company will be the responsible party for third party civil
liability in the event of a nuclear accident.

In addition, the operator of the installation in which nuclear
substances have recently been at the time of the nuclear accident,
will be liable for damages.14 Furthermore, in case the
nuclear substances which caused a nuclear incident have been in
more than one nuclear installation and are not in a nuclear
installation at the time damage is caused, the liable persons would
be as follows: (i) the operator of the last nuclear installation in
which the nuclear substances were before the damage was caused or
(ii) the operator who has subsequently taken them in charge, or
(iii) the operator who has assumed liability pursuant to the
express terms of a contract in writing.15

2. The Carrier

In certain cases, a carrier of nuclear substances may be
responsible for damages in place of the operator. Currently, this
will not be possible in the Turkish example since the first and
foremost requirement for this shift is domestic legislation to this
effect.16

3. Insurer or Financial Guarantors:

Although the Paris Convention does not innumerate insurers or
financial guarantors as liable parties, it allows domestic
legislation to regulate the exercise of compensation claims against
the insurer of the operator or its financial
guarantors.17 The signatory states are compelled to
provide in their domestic legislation, for the requirement of an
insurer or guarantor for nuclear installations. Although case law
in Turkey allows the damaged party to file a lawsuit directly
against the insurer in third party liability
insurances,18 the requirement itself is not yet codified
specific to nuclear accidents. Due to the provisions of the Paris
Convention19, Turkey, too, needs to adopt laws whereby
maintaining an insurance or another form of financial security will
be a must for the operator of a nuclear installation. For the
claims arising from nuclear accidents, the insurer will be
severally liable with the operator up to the amount covered with
the insurance policy. Whether and how much the financial guarantor
will be jointly and severally liable for third party civil
liability claims arising from nuclear accidents will have to be
determined on a contractual basis.

When Does Liability Arise?

Perhaps the most distinct and important aspect of third party
civil liability arising from nuclear incidents is that it is an
absolute liability, in that, the existence of fault is not
required. The peril liability in the New Obligations Code is
introduced parallel to this.

The conditions for liability are limited to the (i) occurrence
of peril, (ii) occurrence of damage to a person or property as a
result of this peril and (iii) existence of causality between the
peril and the damage caused.20

Peril, in this scope, is a nuclear accident occurring in a
nuclear installation or during the carriage of a nuclear substance.
This, as obvious, is a much more specific type of peril than what
the New Obligations Code provides for.21

The extent of the scope of damage goes beyond direct
damages.22 In this case, if damage to a person or
property is caused jointly by a nuclear accident and another type
of accident, and the damage from the nuclear accident itself cannot
be separated from the damage as a whole, then the entire damage
will be considered as damage caused by the nuclear accident and the
liability will be tied to it accordingly.23

Proof of casualty (i.e. that the damage is actually caused by
the nuclear incident) is a pre-condition for liability and in this
case, the burden of proof lies with the party claiming the
damage.24 In any event, the damaged party must prove
that the nuclear damage to him/her or to his/her property was
caused by a nuclear incident in the installation of the operator or
involved nuclear substances coming from such installation.

What Are the Exceptions to Liability?

Due to the uniqueness of its nature, the occurrences that sever
the relation of causality for nuclear damage liability are limited
only to certain force majeure situations, namely (i) an act of
armed conflict, hostilities, civil war or insurrection25
or (ii) a grave natural disaster of an exceptional character (which
brings to mind the Fukushima incident). Turkish soil, lying on one
of the major fault lines and having an unfortunate track record of
terrorist attacks surely stands a risk to that effect.

Another instance where the operator will not liable for damages
is the case of harm to the premises of the nuclear installation
itself or the connecting buildings, including a nuclear
installation under construction or its site.26

In all of the foregoing cases (except for natural disasters),
liability would lie with the third person(s) who cause the damage
to life or property, acting, or omitting to act, with the intention
to cause a nuclear damage.27 Burden of proof would be on
the claimant. As for natural disasters, the Paris
Convention28 leaves room for domestic legislation to
exclude natural disasters from this scope, in which case the
operator would be liable. However, Turkey has not taken legislative
action to that effect.

What is the Limit to Compensation Claims?

The maximum liability of the operator in respect of damage
caused by a nuclear incident is 15 million SDR.29 The
Paris Convention grants the signatory countries the possibility to
establish a different amount on condition that the amount is not
less than 5 million SDR,30 which needs to be determined
by taking into consideration the nature of the nuclear installation
and the likely consequences of the incident.31

Turkish law does not provide for a specific regulation for
determining the ceiling of compensation. Therefore, liability from
third party claims arising from a nuclear accident in Turkey will
be capped at 15 million SDR, excluding the interest and the costs
of the legal action. This is not cumulative; that is, in the case a
nuclear incident occurs in more than one nuclear installation run
by the same operator, the limit of the compensation will be applied
separately for each nuclear installation.32

Although a maximum limit of compensation has been determined,
there is no provision under the Paris Convention nor under Turkish
law, as to how the compensation will be distributed among the
damaged parties in the case where the total amount of compensation
exceeds the maximum limit determined by the Paris Convention.

Interim Compensation

A new mechanism introduced by the New Obligations Code is also
worth mentioning in relation to damage claims. With the entry into
force of the New Obligations Code, from July 1, 2012 onwards, a
party seeking remedy for damages will be able to request the
competent court to take an interim decision against the defendant
to make a pre-payment to the claimant before the final decision on
liability is rendered. The claimant will need to provide the court
with convincing evidence as to the validity of his/her claims and
that his/her economic condition necessitates a temporary payment of
compensation. This mechanism will also apply to third party
liability claims arising from nuclear accidents.

In the event the court rules against the defendant in its final
decision, then the pre- payment will be deducted from the total
amount of final compensation. If, however, the court rules that the
defendant is not liable for damages, the claimant will return the
interim payment together with the statutory interest.

Operator's Right to Recourse

The operator, who is the primary defendant in a claims suite,
can seek recourse only from the persons acting, or omitting to act,
with the intent of causing nuclear damage, or from the persons who
undertake the liability explicitly with a written contract. In the
latter case, the right of recourse will be limited to the scope and
amount expressed in the relevant contract.33

If the liability of the third party arises from a tortuous act,
the operator must prove that such third party caused the nuclear
damage intentionally. The conditions of liability of the third
party differ from the operator in this regard. The operator's
liability is an absolute liability; no fault is required to be held
liable. However, in order for the third party's liability to
arise under the Paris Convention, the operator must prove, before
the competent court, the intention of that third party to cause the
nuclear damage. The statute of limitations for claims on liability
will be two years as of the date when the operator becomes aware of
the identity of the third party and in any case maximum 10 years
from the payment of compensation by the operator to the damaged
party.34

If a third party undertakes liability with a contract, the
conditions of liability will be determined in accordance with the
provisions of the contract. The statute of limitations for the
contractual obligation will be 10 years from the date when the
compensations is paid to the damaged party by the operator.
35

When does a Right to Claim Damages Expire?

The statute of limitations for third party civil liability
claims is 10 years starting from the date of the nuclear incident.
However, in case of damage caused by a nuclear incident involving
nuclear fuel or radioactive products or waste which, at the time of
the incident have been stolen, lost, jettisoned or abandoned and
have not yet been recovered, the prescription period is increased
to 20 years.36

Some countries adopted domestic legislation that provides for a
longer statute of limitations37, though Turkey is not
one of them. The prescription period relating to peril liability
under the New Obligations Code is in parallel to the Paris
Convention provisions: two years starting from the date when the
claimant becomes aware of the damage and the person causing the
damage, and a general statute of limitations of 10 years starting
from the date when the event causing the damage
occurs.38

Venue

Paris Convention confers jurisdiction over claims arising from
nuclear accidents to the country where the nuclear incident
occurs.39 Therefore, the conflict needs to be resolved
by the designated courts under the domestic legislation of that
country.

Among the changes to legislative and regulatory environment in
Turkey, are the new regulations of the Civil Procedure
Code40 pertaining to tortuous acts, which also find
application to cases arising from nuclear incidents. The Civil
Procedure Code, which came into effect very recently (October 1,
2011), favours the claimant by granting jurisdiction not only to
the court at the place where the tortuous act occurred (as did its
predecessor) but also to the court at the address of the plaintiff.
Thus, in case a nuclear incident occurs in Turkey, the competent
court will be the court at the address of the defendant (the
operator or the insurer as the case may be)41, or the
court at the place of the incident or alternatively the court at
the address of the damaged party.42

A Final Word

As nuclear power plants become a reality of the Turkish energy
production scene, so will the domestic regulations need to become
more specific to the case of third party civil liability arising
from nuclear accidents. The introduction of peril liability by the
New Obligations Code and the amendments to the Civil Procedure Code
allowing for forum-shopping in favour of the defendant are a step
forward in that respect. Further changes to the legislative map are
due, implementing in more precise terms, what the Paris Convention
already stipulates in a general manner.

Footnotes

1.The State Atomic Energy Corporation.

2.Turkey signed the Paris Convention on July 29, 1960
(ratified by the Law numbered 299 and dated May 08, 1961) and the
additional protocols respectively on April 10, 1964 (ratified by
the Law numbered 878 and dated June 01, 1967), November 16, 1982
(ratified by the decision of Chamber of Ministers numbered 86/10513
and dated March 25, 1986) and February 12, 2004. The additional
protocol signed in 2004 has not yet entered into force since the
condition regarding ratification by 2/3 of the contracting parties
was not satisfied. Turkey did not ratify that additional protocol
either; therefore the version of the Paris Convention revised in
1982 is still in effect.

3.The Law on Installation and Operation of Nuclear Power
Stations and Sale of Energy dated November 9, 2007 and numbered
5710 (the "Nuclear Energy Law").

4.The Nuclear Energy Law only makes a reference to the
Paris Convention in relation to third party civil
liability.

5.The Turkish Code of Obligations dated January 11, 2011
and numbered 6098, which will enter into force on July 1,
2012.

12.Akkuyu NGS Elektrik Uretim AŞ. The construction
of the power plant has not yet commenced and electricity production
license is yet to be obtained from TETAŞ.

13.The Treaty on Cooperation between The Russian Federation
and the Republic of Turkey for Establishing and Operating a Nuclear
Power Plant in Akkuyu, Turkey was signed on May 12, 2010 and
ratified on July 15, 2010.

14.The Paris Convention, Article 5(a).

15.The Paris Convention, Article 5(c)

16.The Paris Convention, Article 4(d). Other requirements
would be the consent of the operator and the decision of the
competent authority.

17.The Paris Convention, Article 6(a).

18.The new Commercial Code dated January 13, 2011 and
numbered 6102, which will come into force on July 01, 2012,
explicitly stipulates that the damaged third party is entitled to
make a claim directly against the insurer.

19.The Paris Convention, Article 10(a).

20.Paris Convention, Article 3

21.Please see section titled "The Relevant
Legislation" on page 2 of this article.

22.Paris Convention, Article 3(a)

23.Paris Convention, Article 3(b)

24.Paris Convention, Article 3(a)

25.Bringing to mind the terrorist attacks of the PKK
targeting oil pipelines in Sirnak and Mardin on August 11,
2010.

The oil price decline of 2014 forced the global oil and gas industry to take a large step back and look at many of the ways it operated – nowhere more so than in one of the world's most mature basins: the UK Continental Shelf (UKCS).

The Ministry of Energy and Natural Resources (the "Ministry") has recently issued a regulation on mining activities, providing a more investor friendly landscape as part of the application of the Mining Law numbered 3213 ...

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